The Euro crosses have rolled over and appear headed lower for at least the next few weeks.
5 waves up from the January 2007 low at .6535 and daily RSI rolling over from above 70 suggest that a large corrective decline is underway from .8187. The Fibonacci zone does not begin until .7556.
5 waves up from 1.5326 suggests that the longer term trend has turned up. The decline from 1.6376 stopped just shy of the 61.8% of 1.5326-1.6376 and last Tuesday’s candle was a hammer (bullish reversal candle pattern). These are signs of a reversal.
The big picture shows a range playing out as possibly a triangle since 2000. Under this scenario, the pair should be headed lower in wave D of the triangle towards 1.40 over the next number of months. Near term, EURCAD strength was turned back ahead of the 9/1 high of 1.5656. Price ideally remains below 1.5481 now.
It is possible to count 5 waves up from 1.6047 and a corrective decline is likely underway now. The EURAUD has come into the Fibonacci support zone, which extends to 1.6862. This is very close to the former 4th wave, and a likely area for the decline from 1.8277 to end in the next few weeks.
The EURNZD is vulnerable weakness over the next few months to complete wave E of a triangle that began in 1992. The decline could be significant and retrace as much as half (or more) of the advance from 1.6326.
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals every weekday morning (9 am EST), COT Analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.
Contact at jsaettele@dailyfx.com
